Correlation Between Esperion Therapeutics and Bruker

Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Bruker at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Esperion Therapeutics and Bruker into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Esperion Therapeutics and Bruker, you can compare the effects of market volatilities on Esperion Therapeutics and Bruker and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Esperion Therapeutics with a short position of Bruker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Bruker.

Diversification Opportunities for Esperion Therapeutics and Bruker

-0.42

Correlation Coefficient

Esperion Therapeutics  Bruker

Very good diversification

The 3 months correlation between Esperion and Bruker is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Bruker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruker and Esperion Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Esperion Therapeutics are associated (or correlated) with Bruker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruker has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Bruker go up and down completely randomly.

Pair Corralation between Esperion Therapeutics and Bruker

Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 2.31 times more return on investment than Bruker. However, Esperion Therapeutics is 2.31 times more volatile than Bruker. It trades about 0.11 of its potential returns per unit of risk. Bruker is currently generating about -0.08 per unit of risk. If you would invest  161.00  in Esperion Therapeutics on September 25, 2024 and sell it today you would earn a total of  58.00  from holding Esperion Therapeutics or generate 36.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Esperion Therapeutics  vs.  Bruker

Esperion Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Esperion Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Esperion Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Bruker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Esperion Therapeutics and Bruker

The main advantage of trading using opposite Esperion Therapeutics and Bruker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Bruker can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bruker will offset losses from the drop in Bruker's long position.

The idea behind Esperion Therapeutics and Bruker pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.